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#1217182 - 07/14/09 08:17 PM Reg DD Time Deposit Interest Payment Frequency
pacar Offline
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Joined: Jul 2007
Posts: 320
I seem to recall there being some benefit to ensuring that interest paid annually on time deposits with maturities greater than one year...it has to do with a disclosure trigger or something? So if you pay at least annually it's 'better' than if you only pay at maturity?

Does anyone know quickly where I can find this in Reg DD?

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Deposits and Payments
#1217188 - 07/14/09 08:27 PM Re: Reg DD Time Deposit Interest Payment Frequency pacar
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
If you pay interest at least annually, you can avoid having to issue 1099-OIDs (which, in my experience, many customers do not understand).
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#1217201 - 07/14/09 08:52 PM Re: Reg DD Time Deposit Interest Payment Frequency BrendaC
pacar Offline
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Joined: Jul 2007
Posts: 320
Ahh! So it's not in Reg DD, but an IRS issue. Thank you!

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#1217364 - 07/15/09 02:18 PM Re: Reg DD Time Deposit Interest Payment Frequency pacar
StevenD Offline
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StevenD
Joined: Nov 2000
Posts: 489
KY
Also, if you only pay interest at maturity on a term greater than one year, the APY is LESS than the actual interest rate. This is an anomaly of the APY calculation formula.
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